Earlier in the newsletter we had spoke about daily habits that cost us dearly. We all justify these expenses because they are relatively small purchases. You will be amazed to see how these “small” daily pennies add up over the weeks, months and years! Take a look at the figures below to see if you can relate.
It’s only a soda!
A can of soda: $0.75
A can of soda per day per work week: $0.75 x $3.75
A can of soda per day per work week per year: $195.00
Make mine a coffee & donut!
A coffee and donut per day: $2.25
A coffee and donut per day per work week: $11.25
A coffee and donut per day per work week per year: $585.00
Let’s do lunch!
1 take-out lunch a day: $6.00
1 take- out lunch per day per work week: $30.00
1 take-out lunch per work week per year: $ 1,500
Total Savings per Year: $ 2,280

2. Once you have a realistic snap shot of where your funds are going it is time to review it, and make some changes. The changes don’t mean that you have to change your lifestyle, just see what is important. For instance, I have counseled people who went to the coffee shop every morning and spent $3 per day on coffee. Clearly, I am not in the business of telling people to stop drinking coffee, instead I offer the advice of making the coffee trip only on Fridays and Saturdays. The other days make the coffee at home. Doing this will save over $800 per year! It is those pennies a day that add up over time. In this newsletter you will see a breakdown of how much we are spending on daily habits.

3. Pay off or reduce your credit card debt. Yes paying off your credit card debt is ideal, but I understand that is not possible for many people so I say reduce it. Stop charging on the cards and make a habit of paying it down whenever you have the extra money. As the debt reduces your stress level will too. If you pay it off completely do NOT close the card this step can hurt your credit score, because you are reducing your credit history.

4. Establish an emergency fund. It is highly recommended to have 3-6 months of living expenses tucked away, but that is not realistic for millions of Americans. So start putting anything you can away. Each time you get paid take a portion and put into savings. It will psychology make you feel good and you will be amazed how even $10 a week can add up over time.

Answers: 1. A 2.C 3.A 4.B 5.A 6.A 7.C 8.B 9.C 10.C

Take a moment and think about the analogy I am going to give you.  I think most of us can relate and if you are the lucky few that can’t be grateful.  I like to tell my clients to think of savings in the same terms you think of dieting.

Most of us at one point in our lives have gone on a strict diet, especially us girls before bikini time.  We say “ok I am going to lose 15 pounds in one week by eating celery and drinking water!”  Well we know how this story ends.  We do that for a day or two and then we are starving and end up in the fast food drive thru at midnight with a super sized meal.  The reason this happens is because our goal wasn’t reasonable.  We could lose 2 pounds in a week and if that was our goal it would have been achievable.

Now you are thinking how does that relate to savings?  Here’s your answer…if you set an unrealistic goal with savings such as, you are going to save $800 a month while making $2,000 a month you are going to start to do it and “fall off the wagon” so to speak, because it is going to be nearly impossible.  On the other hand, if you set a goal to save $100 a month you will succeed and increase your savings quickly.  Unfortunately, human nature is once we fail we aren’t motivated and a lot of times it takes us a long time to try again.

When it comes to savings everyone should start slow and take baby steps.  We understand that with the current economic situation it is very difficult for many people to save money, however it is very important.  The best advice you will receive is to save anything!  Each time you get paid put anything away, even if it is $5.  The reason why is because you are getting into the mindset of savings so when you come into more money you will psychology put it into savings instead of spending.

Water:

• Take showers instead of baths
• Only run washing machine when full and try to do a large load capacity verse a few small loads
• Run a fully loaded dishwasher instead of hand washing
• Water lawn in morning or evening to prevent evaporation

Electric:

• Upgrade to a digital thermostat
• Adjust or upgrade the water heater and put a timer on it
• Wash clothes in cold water, yes even white clothes.  Hot water will set stains.  Cold water is efficient to clean all clothes.
• Unplug electronics when not used. Plugged in electronics can add 10 percent to your energy bill
• Upgrade light bulbs to CFL’s compact fluorescent lamps. By doing that you can save 10 to 15 percent on bill.

Cable:

• Switch companies and shop online
• Look for promotions with your current company or take advantage of promotions by switching to another company
• Look into bundle plans
• Ask your current company for specials
• Avoid pay per view
• Cancel cable and invest in Hulu, Netflix or internet streaming

Groceries

• Make a list
• Buy healthy food.  Surveys show healthy foods are served in smaller portions and contain more fruits and veggies both of which are cheaper (and better for you) than highly processed alternatives.
• Review your receipt and track your spending to find places to trim your budget.
• Check ads and flyers for items on sale.
• Use off-brand and generic alternatives.
• Shop alone
• Compare prices.  Price tags on store shelves can be deceptive.  Take the time to read the fine print and compare the per ounce or per item cost, which will let you compare actual value.  The cheapest bottle of olive oil doesn’t always contain the cheapest oil.
• Try to avoid the local grocery store.  They are generally more expensive than warehouse stores, such as Wal-Mart.
• Avoid marketing tricks, such as impulse buys.  Every store you go into has items near the register considered impulse buys.  These items are typically priced very high.

Gas

• Be sure your car’s maintenance is up to date and the tires are properly inflated
• Know your prices.  Take advantage of the gas apps and websites to find the cheapest gas in a certain radius.
• Try to avoid rush hour traffic
• Lighten the load.  The heavier your car the more gas you will use.
• Slow down!  Studies have shown going the speed limit will save you on gas mileage
• Go easy on the brake. Stomping on brake and starting really quickly wastes gas.
• Use a/c instead of windows.  You did read that correctly and the reason is aerodynamics.  When you roll your windows down you create a drag.
• When filling your tank only fill tank until pump shuts off. Once the pumps stops it means the car physically can’t take more gas so anything extra will spill or evaporate.
• Keep your car cool. Heat will make your gas evaporate.
• Use cruise control as often as possible.
• Try to avoid getting gas off a highway.

 Entertainment

• Go to your local library.  They have books, DVD’s, classes, etc.  Everything is free!
• Ditch your home internet if your phone has internet.
• Look locally for discount days at local venues and matinees at movie theaters.
• Take advantage of beaches, parks, etc.